/ Money

How ADR can become a more effective system

Alternative Dispute Resolution (ADR) systems must give consumers the power to fight back when they’re mistreated by businesses. Here are our proposals.

It might have been for your cancelled two-week summer holiday. Or it could have been that parcel you ordered that never arrived. First comes the disappointment and frustration, then the dread. You are now staring down the barrel of what could be a lengthy, painful battle with a customer service team to get your money back.

The hold music, at first jolly, quickly becomes intolerable – as does the subsequent protracted email exchange. The whole process, seemingly balanced in favour of the company from the start, leaves you feeling helpless until you eventually accept defeat and walk away. 

If this sounds familiar, then you’re not alone. It is estimated that around a third of consumers experience a problem with a product or service each year, yet only half who then pursue a complaint resolve their problem satisfactorily.

John Penrose MP’s independent report correctly recognised that to unleash the potential of UK businesses, and enable consumers to have confidence in them, we must also have a robust system that allows customers to get things put right, and get redress –  when appropriate – when things go wrong.

How do ADR systems work?

ADR comes in when a third party is required to intervene in a dispute between a consumer and business. There are 50 approved schemes in the UK, overseen by eight ‘competent authorities’. Most regulated sectors (financial services, energy, water and telecoms), have mandatory ADR schemes, though there are exceptions such as the aviation sector that is regulated but ADR is voluntary and as a result many airlines have chosen not to join.

Unregulated sectors such as travel agents, home improvements, car sales and servicing or retail also have ADR schemes but again, companies are not required to join and several haven’t. This leaves consumers with nowhere to turn if things go wrong, except for relatively expensive legal options.

If you’re confused by this, then you’re not alone. But it is within this fragmented patchwork of voluntary and often overlapping schemes that consumers are being most adversely affected. Timescales for resolving a dispute can also drag on for months, and the feeling of powerlessness isn’t helped when companies can walk away from decisions they don’t like.

Take Ryanair’s decision to quit AviationADR after it was ordered to pay thousands of passengers who had flights cancelled due to strike action. The airline saved millions in compensation payments while leaving consumers in the lurch and out of pocket.

Government action is clearly required, as we have set out in our report. For ADR to become the effective dispute resolution system it could be, three main things must happen. 

Three ADR issues to fix

First, the government should create a single mandated Ombudsman scheme for key sectors where transactions are complex or high value and where there are currently a large number of complaints. This already exists for most regulated sectors, but mandatory schemes in sectors such as aviation, car sales and servicing, home improvements and all aspects of property would help to level the playing field for consumers in these areas. 

Second, all ADR schemes should be overseen by an effective competent authority, armed with appropriate resources and powers. Some already are – take Ofgem for gas and electricity, the Financial Conduct Authority for financial services. But a single authoritative body should be mandated by the government to agree performance standards for ADR schemes in every sector and be there to support competent authorities. 

Third, ADR schemes need to be effective, efficient and accountable to the consumer.  Consumers should be able to expect maximum time periods for each step in the process and guarantees that companies will comply with ADR decisions, underpinned by contracts that can be enforced in court if necessary. That would make it harder for businesses to wash their hands of their responsibilities. All approved ADR schemes should commission annual independent surveys of consumer trust and satisfaction to monitor their effectiveness. 

Resolving disputes fairly

The case for the government to resolve these issues is not just to do with saving consumers from financial loss and the stress of a protracted dispute, though those reasons ought to be compelling.

A system that helps consumers and businesses resolve a dispute fairly and efficiently is in both parties’ interests. Pressure on our courts, where waiting times have grown over the past year, would also be alleviated and expensive fees avoided.

Done correctly, ADR schemes can help firms improve their practices and prevent complaints arising in the future, too. 

Work has already been done on how post-Brexit and post-pandemic Britain has the opportunity to redesign and strengthen consumer policy for the better, which is good to see. A climate where businesses can thrive and consumers have the right protection are not mutually exclusive ambitions.

Ultimately, effective enforcement is not only good for consumers, but it is also good for responsible businesses who are less likely to be undercut by unscrupulous competitors. The government has an opportunity to make the system fairer and more accountable for consumers – it should take the opportunity to do so. 


Thank you for your Conversation, Rocio. I’m sure that I am not alone in being aware of ADR but have not used it.

There have been many complaints about Currys in this Conversation: https://conversation.which.co.uk/shopping/currys-pc-world-complaints-faulty-goods/ I see that Currys does offer ADR. Perhaps this would be a useful approach for those who have been waiting for months to resolve problems with this retailer.

It seems to me that signing up to ADR needs to be made compulsory as for far too long businesses and governments and various big organisations have had far too much in their favour and have made it well nigh impossible for anyone but the most affluent and influential to stand any chance of taking on any serious legal challenge should it have to come to that. Like the passenger train operators for instance, and the authorities who regulate them who are EXcluding people severely disabled like me with far more severe misophonia from using their services because far too many of the new trains do not have ANY quiet segregation at all and instead are just fully open from end to end yet they insist that they supposedly “conform to the equality act” simply because they can get a wheelchair through the door and have space for them, while completely ignoring the needs of people like me who NEED quiet. And far too many of them also have sideways facing seats which I can’t use because that causes a brutal form of dizziness which is absolute torture. But how can someone like myself take on such big outfits who will have whole armies of top lawyers? This is why we must have compulsory membership of ADR, and then how effective would ADR be at helping anyone like me who cannot work and are confined to welfare? Would it really work for such people? or would it be yet another EXclusive club, just like so many other routes. So far I’ve tried talking to the local operator who just don’t want to know, and neither does the local MP who just completely ignores everything I write to her, and it’s the same with the disability minister, and the rail ombudsman couldn’t help either, and transport focus tried to help but in the end couldn’t. And the media don’t want to know either, but of course if any wheelchair user is denied a service or in any way excluded from anything then there’s outrage all over the media, but no-one ever wants to know about anyone like me, oh no! Not even the various disability campaign and advocacy groups either. It’s always the same, anyone who would help can’t and anyone who can help WON’T!

Patrick Taylor says:
24 April 2021

” If, after we have provided a final response to your query,”

Currys I suspect spend a lot of time not giving final responses.

Kevin says:
25 April 2021

I’m not clear how ADR relates to Section 75 and Chargeback. For example, wouldn’t Ryanair customers paying by credit card be entitled to a refund from the credit card company?

Kevin – I believe banks and credit card issuers will only pay out as a last resort after all other options within the company’s control have been exhausted.

I thought ADR was something to do with transporting hazardous goods.

You’re not wrong – ADR can also refer to the 1957 UN treaty which governs transnational transport of hazardous goods: https://en.wikipedia.org/wiki/ADR_(treaty)

In this case though we’re referring to Alternative Dispute Resolution schemes: https://www.which.co.uk/consumer-rights/advice/what-is-alternative-dispute-resolution-adr-alOPl0X2lbsO

Patrick Taylor says:
28 April 2021

ADR does have considerable defects and some have not been highlighted by W? – this possibly because Which? uses ADR indirectly through the Which? Trusted Traders business.

So bearing in mind that there is no report on the Trusted Traders program itself – that is number of disputes, resolutions etc one is left going to the various ADR’s who may be involved and seeing what they report.

You might think that a public register of all ADR claims lodged and results would be of huge interest to those concerned about transparency and what can happen when knowledge is suppressed. The idea that the airlines choose an ADR administration because they are different in outcomes has been a concern.

To explain let us take CurrysPCWorld which we know has a huge number of unhappy clients by virtue of its size and its way of dealing with client problems.

So how many clients get to the ADR stage ? Unknown.
Is there a policy of fobbing off so the critical trigger is always avoided? Unknown

Why are there cases related in Trustpilot of people going to law if the ADR system is actually functional?

I have seen hundreds of Currys complaints and none have mention ADR – Why?

Seems to me that until we have a Registry that all ADR’s have to be listed and updated as to result then the proliferation of ADR/Ombudsmen is nothing but a fig-leave to cover the dismemberment of the Trading Standards system.

In India the legal system for small commercial claims between citizens and companies etc was made publicly available as there is a considerable mismatch between what the average consumer knows legally and what companies think they can get away with. If anything in the 70 plus years since independence the introduction of the Web has made the mismatch even bigger so that now most UK citizens are as lost as the illiterate Indian worker of the 1950’s.


an example